Jobless claims rise sharply during holiday week

Reuters Staff

2 Min Read

A man listens to a job interviewer during a screening session for seasonal jobs at Coney Island in the Brooklyn borough of New York March 4, 2014. REUTERS/Shannon Stapleton

WASHINGTON (Reuters) - The number of Americans filing new claims for unemployment benefits rose sharply last week, a potential signal the job market was losing steam although some of the increase might be attributed to temporary holiday factors.

Initial claims for state unemployment benefits rose 20,000to a seasonally adjusted 287,000 for the week ended Dec.26, the U.S. Labor Department said on Thursday.

That was the highest since July, although in recent months the weekly readings for claims have held near a 42-year low.

Economists polled by Reuters had forecast claims rising to 270,000 in the latest week.

Futures for U.S. stock prices were largely unchanged following the report. [.N]

The U.S. labor market heated up in 2015, enough for the Federal Reserve to raise interest rates on Dec. 16 for the first time in a decade, a milestone in the U.S. recovery from the 2007-09 recession.

Many economists expect a slower pace of job market improvement in 2016 even as the unemployment rate falls further from its current 5 percent. After dropping sharply for years, jobless claims have appeared to stabilize since the middle of 2015.

Last week’s data may have been distorted by the holiday period, although the Labor Department said there were no special

factors influencing the numbers. The four-week moving average, which analysts follow closely because it smoothes out volatility, rose 4,500 to 277,000.

Still, claims have been below 300,000, a threshold associated with a buoyant labor market, for 43 consecutive weeks, the longest stretch since the early 1970s.

The claims report showed the number of people still receiving benefits after an initial week of aid rose 3,000 to 2.20 million in the week ended Dec. 19.